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U.S. deficit-cutting panel cites progress in talks
October 5, 2011 / 11:16 PM / 6 years ago

U.S. deficit-cutting panel cites progress in talks

WASHINGTON, Oct 5 (Reuters) - There were hints of progress on Wednesday from U.S. lawmakers serving on a special deficit-reduction panel who are searching for at least $1.2 trillion in savings over the next decade.

“We’re putting everything on the table, trying to look at all the options that we have,” co-chair Patty Murray, a Democratic senator, told reporters following a closed-door session.

Another Democrat, Senator John Kerry, hinted that an outline for the negotiations had been sketched out.

“I don’t want to discuss the framework. I don’t think that’s constructive,” he said, adding, “We’re obviously meeting a lot. We’re going to become even more intense in those meetings now.”

The panel members, who face a Nov. 23 deadline for trying to reach a long-term budget deal, refused to discuss any details after their third day of private talks this week.

On Tuesday, sources told Reuters that most of the six Republicans on the super committee were open to talking about revenue increases as one way of shrinking annual U.S. budget deficits that have been around $1.5 trillion. Those deficits are contributing to a national debt of about $14.7 trillion that has financial markets worried of long-term fiscal stability for the federal government.

If Republicans were to open the door to revenue increases, Democrats, according to sources, would begin negotiating savings in major benefit programs, such as the Medicare and Medicaid healthcare programs for the elderly, poor and disabled.

Taxes and benefit programs are the most politically sensitive issues for Republicans and Democrats, respectively, especially in the run-up to the November, 2012 presidential and congressional elections.

“We’re not preventing things from being put on the table; it doesn’t mean we are bringing them to the table,” said Republican co-chairman Jeb Hensarling.

“But as a matter of approaching these talks, if we take something off, they take something off and the whole thing fails,” Hensarling added.

If a majority of the six Democrats and six Republicans fail to reach a deal on at least $1.2 trillion in savings, automatic spending cuts of that magnitude would begin in 2013.

A failure could also lead eventually to another downgrade in the U.S. credit rating. In August, following a bruising fight between Congress and the Obama administration over increasing U.S. borrowing authority, Standard and Poor’s took the U.S. AAA credit rating down one notch.

The agencies are hoping that the super committee surpasses its $1.2 trillion minimum goal and finds long-term savings of at least $3 trillion to deal with the coming financial strains on government health and retirement programs due to the aging of the “baby boom” generation born between 1946 and 1964. (Reporting by Donna Smith and Richard Cowan; Editing by Cynthia Osterman)

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